India–Nepal Boost Trade Connectivity With New Transit Protocol Amendments

The exchanged LoE paves the way for a major upgrade in rail connectivity by enabling the seamless movement of rail-based freight between Jogbani (India) and Biratnagar (Nepal).

India and Nepal took another decisive step toward deepening economic cooperation as Commerce and Industry Minister of India, Shri Piyush Goyal, held a bilateral meeting with Nepal’s Minister for Industry, Commerce and Supplies, Mr. Anil Kumar Sinha, in New Delhi. The meeting marked a significant development in cross-border trade logistics with the formal exchange of Letters of Exchange (LoE) amending the Protocol to the Treaty of Transit between the two countries.

New Transit Amendments to Transform Rail-Based Cargo Movement

The exchanged LoE paves the way for a major upgrade in rail connectivity by enabling the seamless movement of rail-based freight between Jogbani (India) and Biratnagar (Nepal). Under the revised framework, the definition of cargo eligible for rail transit has been expanded to include bulk cargo, in addition to containerized goods.

This expansion holds substantial strategic importance for Nepal, which relies heavily on Indian ports and transit corridors for its international trade. The refined transit rules now cover essential routes such as:

• Kolkata–Jogbani corridor

• Kolkata–Nautanwa (Sunauli)

• Visakhapatnam–Nautanwa (Sunauli)

By strengthening multimodal connectivity, the amendment supports faster, more cost-effective transportation for Nepal’s imports and exports with third countries, reducing logistical bottlenecks and enhancing trade efficiency.

Direct Rail Connectivity to Boost Customs Integration

One of the most significant features of the updated transit arrangement is the operationalization of direct rail connectivity along the Jogbani–Biratnagar rail link, constructed with Indian grant assistance. This link allows both bulk and containerized cargo to travel directly from Indian ports—Kolkata and Visakhapatnam—to the Nepal Customs Yard cargo station in Morang district, adjacent to Biratnagar.

The railway line, jointly inaugurated by the Prime Ministers of India and Nepal on 1 June 2023, stands as a symbol of deepening bilateral cooperation. With the new LoE, the link will be used to its full potential, drastically improving turnaround times and reducing dependence on road-based freight for long-haul trade movements.

Strengthening Shared Trade Infrastructure

The meeting reviewed ongoing collaborative efforts to enhance cross-border infrastructure and streamline trade processes. Both Ministers expressed satisfaction with progress on:

• Development of Integrated Check Posts (ICPs)

• Modernization of border infrastructure

• Improvements in customs clearance systems

• Expansion of road and rail networks supporting bilateral trade

These initiatives are part of a larger agenda to make trade smoother, faster, and more secure for businesses on both sides of the border.

India’s Role as Nepal’s Largest Trade and Investment Partner

India continues to hold the position of Nepal’s foremost trade and investment partner. A substantial percentage of Nepal’s external trade flows through Indian ports and border points, making efficient transit arrangements essential for Nepal’s economic stability and growth.

With these newly liberalized transit measures, the two countries are poised to further strengthen their commercial and economic partnership. Enhanced connectivity is expected to:

• Reduce trade logistics costs

• Improve supply chain reliability

• Promote industrial growth in Nepal’s border regions

• Encourage greater private sector participation in bilateral trade

A Forward-Looking Partnership

The bilateral meeting reaffirmed the commitment of both nations to building resilient, modern, and mutually beneficial trade linkages. The 2025 transit protocol amendment reflects the shared vision of India and Nepal to deepen economic integration, expand connectivity, and unlock new opportunities for regional commerce.

As both countries continue investing in cross-border infrastructure and policy harmonization, the India–Nepal partnership is expected to evolve into a stronger, more dynamic pillar of South Asian economic cooperation.